Brocade has announced a definitive agreement to purchase Foundry Networks, a performance and total solutions provider for network switching and routing. The acquisition will position Brocade as a provider of enterprise and service provider networking solutions.

The acquisition will bring together two financially strong companies in complementary technology sectors and allow the combined entity to better address today's customer needs, as well as the evolution toward converged networks.

Under the agreement, Brocade will pay a combination of $18.50 of cash plus 0.0907 shares of Brocade common stock in exchange for each share of Foundry common stock, representing a total value of $19.25 (based on Brocade's closing stock price on Friday, July 18, 2008 of $8.27).

The acquisition has been approved by the board of directors of each company and is subject to approval by Foundry's stockholders, regulatory approval and certain other closing conditions.

"We believe the industry is at an inflection point in the way enterprise and service provider networks and data centres are being architected. Customers are demanding networking solutions that meet the needs for today and can address the many advances in network convergence that are still ahead," said Mike Klayko, CEO of Brocade.

Bobby Johnson, Jr, president and CEO of Foundry, said, "Together, we believe we will be a much stronger entity with a compelling value proposition to compete more effectively in and across our respective markets."